WASHINGTON – Purchases of new homes in the U.S. fell more than forecast in December, ending the industry’s best year since 2008 on a sour note.
Sales decreased 7 percent to a 414,000 annualized pace, lower than any estimate of economists surveyed by Bloomberg, after a 445,000 rate in November that was weaker than previously calculated, the Commerce Department reported today in Washington. For all of 2013, demand jumped 16.4 percent to 428,000, the most in five years.
The housing rebound has cooled as bad weather slowed the market and as buyers adjust to higher borrowing costs and rising property values, which have hurt affordability. Nonetheless, builders such as KB Home remain optimistic about the outlook for the market, which will need to expand to meet the needs of a growing population.
“You have some weather effects that can really whip the numbers around from month to month,” Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Fla., said before the report. “Long-term interest rates are going to rise as the economy recovers. The trick is that they shouldn’t rise so quickly that they upset the recovery in housing.”
Stocks trimmed earlier gains after the report. The Standard & Poor’s 500 Index climbed 0.1 percent to 1,791.82 at 10:02 a.m. in New York following the gauge’s worst week since June 2012.
The median forecast of 75 economists surveyed by Bloomberg News called for 455,000. Estimates ranged from 420,000 to 475,000. November was revised down from a previously estimated 464,000 pace.
Demand is rebounding from a record-low 306,000 homes sold in 2011. That compares with a record peak of 1.28 million in 2005 at the height of the housing boom.
The median sales price increased 4.6 percent from December 2012 to $270,200, today’s report showed.